Regulatory reform: Captive insurance companies may no longer be immune

For years, captive insurance companies have been allowed to escape and bypass traditional insurance company regulations. Most proponents to this happening argue that these type of insurance companies deserved special treatment because they have limited investment availability for assets, use policy language directly related to owner concerns, and do not follow typical insurance cycles.

However, the tides are about to change and these captive owners could be required to more closely abide by the regulations and standards of traditional insurance companies. With reform changes expected to help balance the current financial crises and offer the security of a safety net for policy holders, this change could be closer .

This is not the end for captive insurance companies, it is just the beginning. With new regulations and reforms, captive leaders will work to find new ways to capitalize on the changes. Markets will rise once again and eventually, so will captives.

To discuss the current regulatory implications on an existing captive insurance company or to review the possibly of establishing a new alternative risk vehicle, please contact Chivaroli & Associates Insurance Services.